Prime Minister Anthony Albanese says super is an “extraordinary national asset” that should play a critical role in supporting long-term social infrastructure.
In an exclusive interview with Investment Magazine, the prime minister said the government’s plan to legislate a purpose for the super system would not conflict with the government’s hope that super capital was deployed to long-term national priorities like the energy transition and housing supply.
“It’s absolutely consistent,” Albanese said. “One of the reasons why we are legislating for the purpose of super is to reinforce what it’s for so people have dignity at the end of their lives, but it’s also an extraordinary national asset to have a pool of funds that’s available to invest in long term infrastructure and other investments which will produce a good return for the members of those funds. And we need to very much cherish it.”
The comments followed a special edition of the Conexus Financial Political Series, in partnership with BT, at which the prime minister met with industry leaders, including a number of CEOs of major super funds, in an off-the-record forum.
The government used a Conexus Financial Political Series breakfast in February to kick off its campaign to legislate a purpose for super. Its proposed wording, subject to consultation is: “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”. Draft legislation to enshrine the definition is expected within months.
The rare foray into Treasury portfolio territory from the Prime Minister is in lock step with Treasurer Jim Chalmers’ vision that the $3.5 trillion in super assets can be deployed to “big national priorities” without breaching any fiduciary obligations to members or the sole purpose test.
Albanese, a former federal infrastructure minister in the Rudd and Gillard governments, noted that some large Canadian pension funds had a larger exposure to Australian infrastructure than the domestic super funds. The inference was that local funds could and should do more.
“What we need, which is capital being allowed to play a role in those long-term investments, suits retirement incomes by definition, by providing that certainty going forward,” he said.
The prime minister said there were “great examples” of projects that served both the financial interests of members and broader community emerging in social and affordable housing. The asset class has been a major focus of the Treasurer’s Investor Roundtable initiative with major asset owners. Funds including Aware Super, Australian Retirement Trust and Cbus have made pledges or allocations to social housing investments.
The interview came just ahead of the release of the 2023 Intergenerational Report, released by Treasury on Thursday. The document forecasted Australia’s population to grow by about 50 per cent in the next 40 years and superannuation tax concessions to exceed the spend on the age pension in the 2040s.
Albanese said the early findings of the landmark report show why the government has committed to implement 14 of the 22 recommendations of the Quality of Advice Review.
“What the … report will show … is that with the aging of the population, financial services will be even more important in the future. So, it’s important that we get the system right.”
He described super funds as “absolutely critical” to helping Australians navigate a slew of economic and demographic challenges highlighted by the report.
The interview comes ahead of the next instalment of the Conexus Financial Political Series in Melbourne on Monday 28 August, at which Shadow Treasurer Angus Taylor and Shadow Finance Minister Jane Hume will outline their alternative vision for management of the economy and policy affecting the financial services industry.